StrategyMediaThe Practical Guide to Programmatic Planning in China: Part 4

The Practical Guide to Programmatic Planning in China: Part 4

Here is how to select data management platforms (DMP) for a programmatic strategy in China's closed and fragmented data ecosystem.

In my last article, I talked about setting up the buying platform. Today I will be going over how to select data platforms. Data availability has always been the biggest issue in the Chinese programmatic ecosystem. With not a lot of third-party data sources available and a closed publisher data ecosystem, the data management platform (DMP) market is highly fragmented.

For advertisers, there are essentially three choices when it comes to DMP selection: first-party DMP from owned digital assets, second-party DMP offerings from demand-side platforms (DSP), or third-party DMP offerings from publishers or verticals.


First-Party DMP

The data sources of a first-party DMP are usually browsing behaviors from brand owned assets – such as official websites, campaign sites, or brand zones hosted on publisher sites. Aside from these online data sets, some industries also have very strong offline CRM sales databases that can be integrated into the DMP for online ad targeting.

Data dimensions and tags are a combination of real data coming from offline, and inferred data sets based on browsing behavior. Advertisers that go down this route usually have very high data safety and privacy concerns, hence they will mainly choose a technology provider that can host all the previously mentioned data sets.

Building a first-party DMP is most suitable for large brands wanting to implement large-scale programmatic operations that want to have direct control of their data assets. However, the problem for first party DMPs is their data size. Unless the advertiser is an e-commerce site with very large traffic, a normal brand site will rarely have enough data to conduct programmatic buying. This is why it’s important that the first-party DMP vendor has look-alike features to plug into a bigger data pool with this implementation. If not, during a live campaign, the brand simply won’t have enough cookies to identify all the impressions that the publisher is sending to the DMP.

Second-Party DMP

Second-party DMPs are usually offered by demand-side platforms (DSP) or agency trading desks. The data source is essentially advertising data sets from all the campaigns that have been executed on the platform. Therefore, most of the data dimensions and tags will be inferred based on ad interactions.

An issue with this model is the lack of data ownership and transparency. The advertiser will have no transparency into exactly what data is being used, and under what other client campaigns the data has been collected. Campaign data will also be fed back into the second-party DMP, for use by all other clients that use the DSP or agency trading desk (ATD) platform. Worst of all, this model is usually bundled together with inventory, further creating conflict of interest problems.

However, this model is not without its uses. It is suitable for small to medium-sized advertisers that don’t want to build their own programmatic stacks. So if the programmatic investment is only a small part of the advertiser’s budget or if it is only to be used on certain one-off campaigns, then the advertiser will save themselves a lot of hassle by using a second-party DMP.

Third-Party DMP

Although generally lacking in China, more and more third-party DMPs are starting to show up, the biggest one being Tencent’s DMP, which opened access to the market earlier this year. Third-party DMPs in China are very promising mostly because those offering it are publishers.Large publishers like Baidu, Alibaba, and Tencent (BAT) dominate the Chinese Internet.

They have very detailed information on consumers, ranging from pure behavioral information to transactional and personal identifiable information. Consumer portraits based on this data source are considered highly accurate and of great value to advertisers.

This type of DMP has its share of problems too – mostly on the technical integration side. Because most of the third-party DMPs are in their infancy here in China, they will not have ready-made integrations with different DSP platforms.

If an advertiser wants to tap into a third-party DMP, it will most likely require some form of custom development for both the DMP and the DSP. This causes a lot of hassle during the setup phase, but once integrated, the advertiser will be able to tap into this rich data source.

China Programmatic Planning: Key Takeaways

As my fourth and final column in this series on programmatic in China, here are my key steps for every advertiser as they begin their programmatic implementation in China:

1. Understand the different types of programmatic and the implications that it brings to inventory quality and transaction models.

2. Reduce conflict of interest by separating programmatic vendors into specific disciplines, the most important disciplines being: data, inventory, and operations.

3. Create a brand/advertiser trading desk platform that plugs into multiple DSPs and DMPs to avoid vendor lock-in and give the brand more choice and flexibility.

4. Use different DMP setups as programmatic adoption gains more traction, starting from second-party and third-party, and eventually create a brand owned first-party DMP for maximum control.

*Homepage image via Shutterstock


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